Microsoft has not made too many friends in the channel this past week. Its announcement last Thursday that it was cutting Internal Use Rights for partners has drawn significant ire from its partner network.
Partners have been very vocal about what they think of Microsoft's decision. But in reality, what, if anything, are partners planning on doing to manage their Microsoft business as a result of this news?
With Gold and Silver Microsoft members remaining unclear on exactly how the changes will affect them, there is talk of letting memberships expire in order to use membership fees to pay for licenses that would have previously been given for free.
For some, this depends very much on whether Microsoft further tightens the competency requirements for its top members.
"If they increase the required new customers in Silver Competency to something unattainable for us for the year, say from four to 20, we might consider letting the partner membership lapse and just using the money we were previously using for the partner program for licensing instead," Vince Tinnirello, managing director at Denver, CO-based Anchor Network Solutions, a Silver Microsoft partner, told CPI in an interview.
If not, however, he said the MSP will keep renewing its membership because there is "absolutely value" in having a competency.
"Clients like to know we have expertise in Office365, and they can find us for deployment services for O365 if we have one."
Larger Microsoft partners, like Seattle, WA-headquartered 2nd Watch, told CPI it would be "too large and expensive an effort" to let Gold and Silver memberships expire and invest the monies used for this into licenses.
However, partners told us they will most definitely be paring back licenses as a result of the move from Microsoft. Greg Hanssen, CTO at Alexandria, VA-based MSP Ciracom, a Silver Microsoft partner, told CPI Ciracom will "obviously cut back" on certain types of license.
"Right now we've got a bunch of high-end licenses. Obviously we're going to be more careful about what we're deploying into our tenants because right now we've got E5 licenses deployed for everybody because that's what we have for free. We're going to be paring that down to a minimalistic license package unless they need it," he said.
A knock-on effect of this, Hanssen pointed out, is that the changes will make it harder for Ciracom to "live in Microsoft's higher-end products" and, therefore, sell those higher-end products.
"Because you can take as many classes as you can, pass as many tests as you want, but in the end, until you start using it, you don't know all the little details. So this creates a barrier for us to be able to start using that software because the demos don't necessarily do the trick," he said.
Aside from this, however, Hanssen notes that the number of licenses his firm uses is relatively small, so having to buy them won't be a huge overhead for the business. He adds that Ciracom isn't considering letting its Silver membership expire to cover the cost it may now face for additional licenses because of the other benefits associated with being a member.
Meanwhile, for some, the news is viewed simply as a vendor reevaluating its partner base, which could lead to some positive changes. Michael Goldstein, CEO at Fort Lauderdale, FL-based LAN Infotech - a Gold and Silver Microsoft partner - told CPI this is just channel Darwinism at play and Microsoft is just making sure it's "keeping the best of the best".
As such he isn't planning to make any changes as a result of the news, and views it in a positive light.
"I think this is going to increase my business, because I think there's a lot of lot of smaller players that might be taking this negatively and that are not prepared with the training, the background, and having a Microsoft relationship."
He expects to see more business coming his way as a result of the changes, he said. He also noted that because LAN Infotech pays for Microsoft support, it has such costs already factored into its business plan.
He added: "We've gone through an aggressive last year and we are continuing this year to make sure that we keep those competencies up and work our way higher up the Microsoft food chain. I'm going to benefit from this and I think that they're just filtering through the channel.
"The vendors want to make sure that we're 100 percent in there for them, so this makes me dig in more with Microsoft."
Others feel it's simply too early to plan for hard and fast changes. Many agree with the sentiment laid out by Jeff Aden, founder and EVP of marketing and business development at CSP 2nd Watch, who told CPI that the firm is simply going to "monitor the situation closely and assess its impact before making any rash decisions".
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